Injury Prevention, Rehabilitation, and Compensation Amendment Bill

I move, That the Injury Prevention, Rehabilitation, and Compensation Amendment Bill be now read a first time. At the appropriate time I intend to move that the bill be considered by the Transport and Industrial Relations Committee, that the committee present its final report on or before 18 December 2006, and that the committee have the authority to meet at any time while the House is sitting, excepting during questions, during any evening in a day in which there has been a sitting of the House, and on a Friday in a week in which there has been a sitting of the House, despite Standing Orders 192 and 195(1)(b) and (c).

The Injury Prevention, Rehabilitation, and Compensation Act 2001 provides a fair and sustainable scheme for minimising both the overall incidence and the impact of injury in the community. A key goal of the Act is to ensure that the Accident Compensation Corporation (ACC) scheme is funded in a fair and sustainable manner. The bill continues to progress this goal through merging the accident compensation self-employed work account and the employers’ account into a single work account, so that levies are more stable and provide a better reflection of risk. Currently levy payers and their injury claims are allocated to either the self-employed work account or the employer’s account on the basis of their business structure, which is derived from tax information.

The self-employed work account was established as an ACC-run default account to support the creation of the private insurance market for employer and self-employed workplace injury cover in 1999. When workplace injury cover was returned to the Government-run accident compensation scheme, the self-employed work account was retained as a separate account on the basis that the self-employed had a higher rate of serious injury than employees. Further consideration indicates that a higher average rate of serious injury for the self-employed is mainly due to the clustering of self-employed people in high-risk industries and occupations, such as forestry, fisheries, and farming. Business structure—in this case, self-employment—is not considered a significant risk factor.

The ASSISTANT SPEAKER (Ann Hartley): I am sorry to interrupt the member, but I have given members leeway. They know they are not to stand and have meetings while a member is speaking. Please leave the Chamber immediately and quietly.

The self-employed work account has also had a high degree of volatility, due to its small earning space combined with a high turnover of levy payers from year to year. Small businesses particularly have cited levy instability as creating problems for their business cost planning. The merger will ensure that accident compensation levies paid by businesses are fairer, as they will be based on the injury risk associated with the activity undertaken, rather than on the basis of the business structure. It will ensure that the levies are more stable for both the self-employed and employers. It will also improve the focus of reducing the risk of injury by encouraging industries to better coordinate health and safety across their workplaces, regardless of business structure.

The existing funds and claims currently allocated to the employers’ account and self-employed work account will be transferred to the new work account. The work account will continue to fund the entitlements that are provided for under the Act at present. Programmes allowing for levy adjustments based on safety management practices and the ability of the self-employed and shareholder employees to purchase an agreed amount of weekly compensation cover will also be retained under the work account. Employers, private domestic workers, and self-employed people will pay levies into the work account to fund the cost currently provided for under that account.

To ensure that the transition to a single work account is as fair and smooth as possible, the bill provides for a transition period of 3 years for the self-employed and employer levy rates in each industry or risk class to equalise. During this period levy rights would be only able to increase or decrease by up to 25 percent in relation to the previous year’s levy rates. After the transition period is complete employers and self-employed people in the same industry or risk class would pay the same levy rate.

The bill also renames the medical misadventure account the treatment injury account. The Injury Prevention, Rehabilitation, and Compensation Amendment Act (No 2) 2005 replaced the “medical error” and “medical mishap” definitions with a “treatment injury” definition and removed the necessity to find fault in order to obtain cover for treatment injuries. Those new provisions were implemented on 1 June 2005. At the time of the amendment the name of the account to which such claims are allocated—the medical misadventure account—was retained for purposes of continuity. As health professionals and health-professional organisations are now familiar with the new systems, terms, and cover provisions that have been implemented, it is appropriate that the medical misadventure account be renamed the treatment injury account.

Our Government is committed to providing strong public services. Creating a fair and simple accident compensation scheme that reduces the incidence and impact of personal injury is our goal. This bill builds on the framework provided by the existing legislation by ensuring that the accident compensation scheme is funded in a fair and sustainable manner. I commend the bill to the House.

Debate interrupted.